Global Banks’ Gold vs. Bitcoin Charade: Schiff Calls Their Bluff

Wall Street’s latest magic trick? Pretending to choose between gold and Bitcoin while quietly stacking both. Peter Schiff—gold bug turned crypto skeptic—isn’t buying the act.

Behind the scenes, institutions are playing both sides. Gold ETFs get the press releases, while Bitcoin futures open interest hits record highs. Classic finance: hedge your bets, then charge fees on both.

Meanwhile, retail investors get the age-old runaround: ’Wait for regulatory clarity’—translation: ’We’re still front-running our clients.’

TLDR

• Peter Schiff questioned why central banks are increasing gold reserves instead of choosing Bitcoin.
• Despite Bitcoin reaching $111,000, central banks trust gold over digital assets.
• Schiff warned that rising interest rates could expose weaknesses in the Bitcoin market.
• The U.S. dollar, stocks, and bonds declined while gold and silver prices rose.
• Schiff blamed increased government spending and a debt downgrade for recent market turmoil.

Peter Schiff questioned the role of Bitcoin (BTC) in global finance as central banks continue increasing their gold reserves. Despite Bitcoin reaching a new high of $111,000, Schiff highlighted a strong preference for gold among central banks. He raised concerns over U.S. financial instability while predicting better performance for precious metals.

Bitcoin’s Status Challenged as Central Banks Choose Gold

Peter Schiff questioned why central banks favor gold over bitcoin when preparing for a shift from the U.S. dollar. His remarks came amid growing global concerns over economic shifts and weakening confidence in fiat currencies. Central banks from countries like China and Russia have recently boosted their gold holdings instead of buying Bitcoin.

This decision suggests they seek stability through time-tested assets while remaining skeptical of Bitcoin’s long-term role. Schiff pointed out that although Bitcoin is considered a digital alternative, central banks continue treating it as speculative. With Bitcoin’s price reaching new heights, the absence of institutional adoption from central banks remains notable.

If Gold is the past and Bitcoin is the future, why are foreign central banks that are preparing for a future where the U.S. dollar is no longer the reserve currency, replacing their dollar reserves with gold and not Bitcoin?

— Peter Schiff (@PeterSchiff) May 24, 2025

Bitcoin continues to attract global attention, yet its adoption among major financial institutions remains limited. On the other hand, Gold retains institutional trust due to its historical role and proven value in financial systems. Schiff believes central banks will likely stay with gold unless Bitcoin offers more than price volatility and hype.

Rising Interest Rates May Test Bitcoin’s Resilience

Schiff warned that Bitcoin may face a significant test as long-term interest rates continue to rise. He criticized digital asset supporters and tech market participants for ignoring these growing financial pressures. As yields on 10-year U.S. government bonds ROSE above 4.5%, financial markets responded with increased caution.

Rising interest rates may attract capital away from Bitcoin into safer, yield-generating assets. Schiff argued that higher borrowing costs could strain Bitcoin’s speculative appeal and expose underlying weaknesses. With economic conditions tightening, he believes the breaking point for Bitcoin could be approaching quickly.

While Bitcoin supporters remain optimistic, Schiff emphasized that macroeconomic shifts could trigger market corrections. He said the crypto market remains vulnerable to rate shocks and tightening liquidity. This sentiment reflects broader concerns about Bitcoin’s ability to act as a hedge under current conditions.

U.S. Financial Health Concerns: Schiff Blames Spending, Debt Downgrade

Schiff also criticized the U.S. government’s financial management, pointing to recent events as warnings for future instability. He referred to a large spending bill passed by Congress, which he claimed WOULD expand the national debt without real solutions. Moody’s downgraded U.S. government debt by one notch, signaling reduced credit confidence.

These developments hurt confidence in U.S. markets, with stocks, bonds, and the dollar all falling last week. Meanwhile, gold and silver prices rose, signaling a MOVE toward safer assets as uncertainty grows. Bitcoin rose in value, yet Schiff dismissed the rally as disconnected from underlying economic fundamentals.

Despite Bitcoin’s current momentum, Schiff forecasted that continued weakness in U.S. markets could strengthen precious metals. He asserted that gold, silver, and platinum remain safer options for capital preservation amid growing debt and monetary uncertainty.